Uber picks savvy dealmaker, not 'tech bro' as new CEO

FILE PHOTO - Expedia CEO Dara Khosrowshahi poses for a portrait during the 2010 Reuters Travel and Leisure Summit in New York, U.S. February 22, 2010. REUTERS/Lucas Jackson/File Photo

SAN FRANCISCO (Reuters) - Dara Khosrowshahi may have been the compromise choice for Uber Technologies Inc’s [UBER.UL] new chief executive.

But for a bitterly divided board of directors at a dysfunctional yet highly innovative company, compromise may be what Uber needs.

Khosrowshahi, the 48-year-old CEO of online travel booking company Expedia Inc, is a friendly and steady hand, a savvy dealmaker, a committed defender of diversity and vocal critic of U.S. President Donald Trump, according to those who know him.

Under his watch, Expedia has become the largest online travel agency by bookings, making a number of strategic acquisitions to build a travel empire and more than doubling its revenue in four years. He has satisfied Wall Street with a stock price that has grown more than six-fold during his 12-year tenure.

“Dara is a very focused, disciplined adult,” said Henry Harteveldt, a travel industry analyst with Atmosphere Research Group. “He’s not a tech bro.”

People who have worked with Khosrowshahi said he evolved from being a tough dealmaker at investment bank Allen & Co into a well-rounded executive who still loves the deal but can also make peace with government regulators and compromise where needed - both skills required by Uber.

Khosrowshahi’s success in acquisitions and partnerships at Expedia will potentially benefit Uber in Asia especially, where the company is locked in a fierce price war that shows no sign of ending.

“The kind of partnerships we need in Southeast Asia are going to be easier with someone like him at the helm,” said Bradley Tusk, an Uber investor and adviser. “He encompasses a lot of the balance that we need that we weren’t getting with the other candidates.”

His experience with class action lawsuits brought against Expedia gives him some expertise to deal with the litigation Uber faces, said industry analysts. But bigger legal threats such as a trade-secrets theft lawsuit filed by Alphabet Inc’s Waymo will be new territory.

While not a household name in the technology business, Khosrowshahi has deep connections in the industry. His cousins Ali and Hadi Partovi are successful tech investors. Hadi Partovi told Reuters his cousin was “someone that people look to in times of tension as a guy who can bring people together,” while his brother Ali said Khosrowshahi “can bring order to chaos.”

Khosrowshahi did not respond to requests for comment. Spokesmen for Uber and Kalanick declined comment.

CALM LEADER

People close to Khosrowshahi paint him as distinctly different from the famously brash Kalanick: calm, low-key and not the “call you and scream kind of guy,” said one person who has worked with him.

He is an Iranian immigrant who came to the United States in 1978 during the Iranian Revolution. Upon his family’s arrival, Khosrowshahi faced discrimination as other young Iranians in the 1980s did.

Today, Khosrowshahi is an outspoken defender of minorities. Expedia was among the companies that filed a legal challenge to Trump’s January travel ban targeting several Muslim-majority countries, including Iran.

He publicly called the president’s ban “the worst of his proclivity toward rash action” and called on the U.S. government “to do its job, thoughtfully.”

The third child in his family, he was vice president of his high school’s student body and captain of the soccer team, Hadi Partovi said. He has since moved on to Peloton indoor exercise bikes.

He received a bachelor’s degree in engineering from Brown University and got his start in business at Allen & Co. While working at IAC alongside Expedia Chairman Barry Diller, Hadi Partovi said his cousin learned how to work with strong personalities.

“He’ll need to do that with Travis Kalanick, clearly,” he said.

Khosrowshahi is a strong recruiter and will help attract the executive talent that Uber needs, several investors said. Among Khosrowshahi’s first tasks at Uber would be filling the roles of chief financial officer, chief operating officer and general counsel, among other vacancies.

Khosrowshahi’s outsider status - he is not part of the circle of celebrity tech executives, nor does he work in Silicon Valley - may bode well for helping Uber rebuild its culture, which has been described as toxic and sexist.

DEAL NOT DONE

The challenges Khosrowshahi faces at Uber were apparent in the unusual dynamics of the CEO search itself. As of Monday evening, Uber still had not confirmed that he had been hired, though Diller said in an email to Expedia staff that he expected Khosrowshahi to leave for Uber.

That Khosrowshahi was even in the running for CEO was unknown until after the board voted Sunday. He beat out Meg Whitman, CEO of Hewlett Packard Enterprise Co and a favorite of Uber investor Benchmark Capital; and Jeff Immelt, former CEO of General Electric Co and a favorite of Kalanick.

“He is the result of a deeply divided board,” said Erik Gordon, an entrepreneurship expert at the University of Michigan’s Ross School of Business.

Analysts and investors expressed optimism about the decision, which ended a messy, months-long search.

“Dara’s experience and his proven track record of success make him the right choice to lead Uber,” said Shervin Pishevar of venture firm Sherpa Capital.

But some were skeptical of the technology chops he will bring to Uber. Harteveldt said Expedia has been slow to adopt new technologies that would give customers more personalized travel choices. At Uber, Khosrowshahi will have to make big decisions about autonomous cars and machine learning.

He is known for running a tight ship, leading some analysts to speculate he will cut back on Uber’s side businesses that burn money, such as its Uber Freight service that matches truckers with freight loads.

“Pruning some of Uber’s more experimental or money-losing efforts” might be on the horizon, said Anand Sanwal, CEO of venture capital data firm CB Insights.

But the biggest unknown, said Uber investors, is how Kalanick will respond to Khosrowshahi. The ousted CEO faces a lawsuit from Uber shareholder and board member Benchmark Capital, accusing him of meddling in the CEO search to regain power.

How Khosrowshahi feels about that remains to be seen.

“If Uber can’t be turned around, he’ll wipe his hands and walk away, and say ‘I tried to repair the Titanic, but the iceberg got the better of us’,” Harteveldt said.

Reporting by Heather Somerville and Jeffrey Dastin in San Francisco; Additional reporting by Salvador Rodriguez; Editing by Jonathan Weber and Bill Rigby